Loan Repayment Calculator
Work out the monthly payment on a fixed-rate loan, plus the total you will repay and how much of that is interest. Enter the loan amount, the annual interest rate and the term in years. The figures are currency-neutral, so read them in whatever currency you borrow in.
Last updated: June 2026
Enter the loan amount, interest rate and term above.
Monthly payment uses the fixed-rate amortization formula · total repaid = payment × months · interest = total - loan amount
How a loan repayment is calculated
A fixed-rate loan is repaid in equal monthly instalments through a method called amortization. Each payment is split in two: part covers the interest charged that month on the balance still owed, and the rest reduces the balance itself. Because the balance is highest at the start, early payments are mostly interest and later ones are mostly principal, even though the payment amount never changes. The single monthly figure that makes the loan clear exactly at the end of the term is what this calculator returns, along with the total you will hand over and how much of it is pure interest.
The three numbers that set your payment
Only three inputs drive the result. The loan amount is the principal you borrow. The annual interest rate, divided by twelve, is the monthly rate applied to the outstanding balance. The term, in months, is how long you spread the repayment over. Raising the amount or the rate pushes the payment up; lengthening the term pulls the monthly payment down but stretches interest across more months. A zero percent promotional loan is simply the amount divided by the number of months, with no interest at all.
Why a lower monthly payment can cost more
Lengthening the term is the usual way to make a payment affordable, but it is the expensive choice. A 10,000 loan at 6 percent costs about 1,600 in interest over 5 years and around 3,300 over 10 years, so halving the monthly payment roughly doubles the interest bill. The right term is the shortest one whose payment fits your budget, not the longest one a lender will offer. Use the table below to see the trade directly.
Worked example
Borrow 10,000 at a 6 percent annual rate over 5 years. The monthly rate is 6 divided by 12, which is 0.5 percent, applied over 60 monthly payments. The amortization formula gives a monthly payment of 193.33. Across all 60 payments you repay 11,599.68, so the interest is 1,599.68, about 16 percent of the amount borrowed. Shorten the term to 3 years and the payment rises to 304.22 but the interest falls to 951.90; stretch it to 10 years and the payment drops to 111.02 while the interest climbs to 3,322.46.
A 10,000 loan at 6 percent across terms
| Term | Monthly payment | Total repaid | Total interest |
|---|---|---|---|
| 1 year | 860.66 | 10,327.97 | 327.97 |
| 3 years | 304.22 | 10,951.90 | 951.90 |
| 5 years | 193.33 | 11,599.68 | 1,599.68 |
| 10 years | 111.02 | 13,322.46 | 3,322.46 |
Same loan and rate, longer term: the monthly payment falls but the total interest climbs steeply. Figures are currency-neutral.
Frequently Asked Questions
How is a monthly loan payment calculated?
Lenders use the amortization formula, which spreads the loan and its interest evenly across every month of the term. The monthly payment is the principal multiplied by the monthly interest rate and by a factor that accounts for compounding over the full number of payments. Each payment covers that month's interest first, and the rest reduces the balance, so early payments are mostly interest and later ones are mostly principal. This calculator applies the same formula banks use, so the monthly figure it returns is what a fixed-rate loan would actually charge.
Why does a longer loan term cost more overall?
A longer term lowers the monthly payment because the same principal is spread over more months, but you pay interest for longer, so the total cost rises. A 10,000 loan at 6 percent costs about 1,600 in interest over 5 years but around 3,300 over 10 years, roughly double, even though the monthly payment drops by more than 40 percent. The monthly saving is real, but it is borrowed from your future self. Choose the shortest term whose monthly payment you can comfortably afford.
What is the difference between APR and the interest rate?
The interest rate is the cost of borrowing the money itself, and it is what this calculator uses. The APR, or annual percentage rate, bundles the interest rate together with compulsory fees such as arrangement or broker charges, so it is usually a little higher and is the fairer number for comparing loan offers. If your loan has significant upfront fees, enter the interest rate here for the payment, then compare lenders on APR to see the true cost.
How much does the interest rate change my payment?
Quite a lot over a long term. On a 10,000 loan over 5 years, moving from 4 percent to 8 percent raises the monthly payment by roughly 20 and adds about 1,100 to the total interest. The effect compounds with both the loan size and the term, so on a mortgage-sized balance a single percentage point can mean tens of thousands over the life of the loan. Always shop the rate, and recheck the payment here whenever a lender quotes a different figure.
Can I save money by paying off a loan early?
Usually yes. Any payment above the scheduled amount goes straight to the principal, which shrinks the balance that future interest is charged on, so overpaying early saves the most. Clearing a loan ahead of schedule can save a large share of the remaining interest. Check your agreement first, because some fixed-rate loans charge an early-repayment fee that can offset part of the saving. Where there is no penalty, regular overpayments are one of the cheapest ways to cut borrowing costs.
Methodology and sources
This tool returns the fixed monthly payment that fully repays a loan over its term, together with the total repaid and the total interest, so you can compare the monthly cost against the lifetime cost before you borrow.
- Method: Monthly payment M = P × r × (1 + r)^n ÷ ((1 + r)^n - 1), where P is the loan amount, r is the annual rate divided by 12, and n is the term in months. Total repaid = M × n. Total interest = total repaid - P. A zero percent rate is handled as M = P ÷ n.
- Standards and sources: The standard amortization (annuity) formula used by banks and lenders for fixed-rate instalment loans and mortgages. It assumes interest compounds monthly on the declining balance, which is the convention for most consumer loans.
- Assumptions and limits: Assumes a fixed interest rate, equal monthly payments and monthly compounding, with no fees, insurance or early-repayment charges included. Real offers may quote an APR that folds in fees, and variable-rate loans change over time. Amounts are currency-neutral; read every figure in the currency you enter. This is a planning aid, not financial advice.
Reviewed and maintained by Rick Oosterling, a maker and developer who runs the numbers before signing for tools, vehicles and home projects. Last reviewed: June 2026. This is a planning aid, not financial advice; confirm any real offer's payment and total cost with the lender's own figures.